Internal Controls

MilDef’s Board of Directors and CEO are ultimately responsible for ensuring that internal controls are developed, communicated, and understood by the employees of the company and that the control structure is monitored, enforced, updated, and maintained. The Board of Directors shall, among other things, ensure that MilDef has good internal control and formalized procedures that ensure compliance with established principles for financial reporting and internal control. MilDef’s internal control procedures are based on the internal control framework published by COSO (En. Committee of the Sponsoring Organizations of the Treadway Commission), which is based on 17 fundamental principles linked to five components. Internal control procedures are based on a control environment that creates discipline and structure for the other components: risk assessment, control activities, information and communication, as well as follow-up, evaluation and reporting. 

The procedures for internal control, risk assessment, control activities, and follow-up regarding financial reporting have been designed to ensure reliable overall financial reporting and external financial reporting in accordance with IFRS, applicable laws and regulations and other requirements applied by companies listed on Nasdaq Stockholm. This work involves the Board of Directors, MilDef’s Group Management, and other staff. 

Control environment 
MilDef’s Board of Directors has established instructions and governance documents in order to regulate the role and division of responsibilities of the CEO and the Board of Directors. The way in which the Board monitors and ensures the quality of internal control is documented primarily in the Board’s Rules of Procedure, MilDef’s Financial Manual and Corporate Governance Policy, where the Board has established a number of basic guidelines relevant to the work on internal control. The work on internal control is also stated in other governance documents such as MilDef’s Code of Conduct, the Directives on Risk Management and Internal Control and additional policies established by the Board of Directors and directives established by group management. These include, among other things, regular monitoring and follow-up of outcomes compared to expectations and previous years, as well as supervision of, among other things, the accounting policies that MilDef apply. The responsibility for maintaining an effective control environment and the ongoing work on risk assessments and internal control regarding financial reporting is delegated to the CEO. However, the Board of Directors, through the Audit Committee, is ultimately responsible. 

Managers at different levels within MilDef have corresponding responsibilities within their respective responsibilities. Group management reports regularly to the Board of Directors and the Audit Committee in accordance with established procedures. Responsibility and authority, instructions, guidelines, manuals and policies and directives, together with laws and regulations, constitute the control environment regarding financial reporting.